GE runs into doubts on Wall Street over dividend cut, CEO vision

Wednesday, 15 November 2017, 06:32:34 AM. General Electric slashed its dividend in half as investors gathering in Boston, where Chairman and CEO John Flannery is expected to lay out a significant
Even before began talking, Monday looked like one more bad day for . It began around 6:30 a.m., with news that GE, once one of the most celebrated U.S. companies, was cutting its quarterly stock dividend for only the second time since the Great Depression. Then things got worse. In front of hundreds of investors in Midtown Manhattan, the new CEO delivered his long-awaited plan to shrink the beleaguered company back into Wall Street's heart. GE, he said, would now focus on just three businesses -- power, aviation and health-care equipment -- and exit others that have defined the quintessential American conglomerate for decades. The reaction in the stock market was swift and brutal. GE's stock price, already down 35 percent this year and the worst performer in the Dow industrials, tumbled on Monday by the most in two years. While Flannery's plans were generally in line with recent speculation, his presentation left some investors wondering whether his revamp would be enough to right the the 125-year-old company. "There is no doubt that the plan outlined today marks a new era for GE," Deane Dray, an analyst at RBC Capital Markets, said in a note to clients. "That said, does it go far enough?" GE plunged 6.9 percent to $19.08 at 12:39 p.m. in New York after sliding as much as 7.1 percent for the biggest intraday drop since August 2015. "John Flannery's strategic road map reflects a rigorous portfolio review, but suggests a tough slog ahead," Gautam Khanna, an analyst at Cowen &...Read more
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